Correlation Between Merchants Marine and Security Bank
Can any of the company-specific risk be diversified away by investing in both Merchants Marine and Security Bank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Merchants Marine and Security Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merchants Marine Bancorp and Security Bank, you can compare the effects of market volatilities on Merchants Marine and Security Bank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Merchants Marine with a short position of Security Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merchants Marine and Security Bank.
Diversification Opportunities for Merchants Marine and Security Bank
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Merchants and Security is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Merchants Marine Bancorp and Security Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Bank and Merchants Marine is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Merchants Marine Bancorp are associated (or correlated) with Security Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Bank has no effect on the direction of Merchants Marine i.e., Merchants Marine and Security Bank go up and down completely randomly.
Pair Corralation between Merchants Marine and Security Bank
If you would invest 151.00 in Security Bank on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Security Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Merchants Marine Bancorp vs. Security Bank
Performance |
| Timeline |
| Merchants Marine Bancorp |
| Security Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merchants Marine and Security Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merchants Marine and Security Bank
The main advantage of trading using opposite Merchants Marine and Security Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merchants Marine position performs unexpectedly, Security Bank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Security Bank will offset losses from the drop in Security Bank's long position.| Merchants Marine vs. Mission Valley Bancorp | Merchants Marine vs. Harbor Bankshares | Merchants Marine vs. Oconee Financial | Merchants Marine vs. MF Bancorp |
| Security Bank vs. Merchants Marine Bancorp | Security Bank vs. First Bancorp | Security Bank vs. CNB Financial | Security Bank vs. MNB Holdings Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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